The convenience of buying insurance online needs no elaboration. There are times when one needs to buy insurance for tax savings before the end of a financial year. If you are running out of time or need savings on premium, you can go online. But convenience is not the reason for choosing an insurance policy. How good an insurance policy is, depends on how claims are settled. Before buying a life cover online, you need to enquire in detail about the claim-settlement process of the insurer.
According to Vipin Anand, chief–corporate communications, Life Insurance Corporation of India (LIC), "Younger customers look for a policy that offers the convenience of buying through mobile (telephony). The most important aspect of life insurance is claim settlement. LIC has the lowest percentage of claims repudiation."
The online insurance space for term-life policies is witnessing the entry of several players. Future Generali has just launched its 'Smart Life' plan. The product aims to tap into the market of young, technologically-savvy Indian customers by providing financial security and protection at a click. Other insurers offering online term life insurance covers are Aegon Religare, ICICI Prudential, MetLife, and Kotak Mahindra Old Mutual Life.
The process is quite simple. Details about employment, income, insurance history, lifestyle, family history and medical history need to be filled in. In case the insurer determines that you need a medical test, your online purchase of term life insurance will not be completed. Once the test is completed and evaluated by underwriting, the policy is issued.
ICICI Prudential's iProtect life insurance scheme asks a person to go for a medical test if he/she already has a life insurance cover. This is because the risk perception is higher when you are buying a second policy. For first-timers, no such test is required. But the company decides whether a medical test is required, on a case-to-case basis.
Aegon Religare's iTerm Plan has policies for three situations. One, if the total sum assured (even if it is through different policies) is Rs50 lakh and above. Two, if the age of the insured is above 40. And three, if the applicant has an existing medical problem.
Future Generali's Smart Life plan offers sums assured ranging from Rs10 lakh to Rs50 lakh. For policyholders buying large sum assured levels, a large discount/rebate is available for sum assured between Rs25 lakh and Rs50 lakh. The brochure does not clarify whether medical examination is required.
The regulator allows insurance companies to charge differential premium for online and offline life products. If you have purchased the product through a branch or agent, they will take up the task of helping your dependents for filing claims.
In case of an online policy, dependents may have to approach the centralised claims cell directly. This may be a cause of inconvenience for some, due to lack of personal connect. That apart, most online term policies are not comprehensive as they either do not offer any rider options or the ones offered fall short compared to those available with offline term policies.
The thumb rule is that life insurance cover should be minimum 10 times your annual salary. It will also depend on your expenses, number of dependents, etc. Online purchase of insurance will make you forego any advice a financial planner can offer you. In case you are dissatisfied with your policy, you can surrender it within the 15-day 'free-look' period.
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